Many businesses commonly allow customers to submit checks as a form of payment. In a traditional scenario, a business may ask a customer who offers a check to present one or more forms of identification. Based on this information, the business may decide to accept or decline the check as payment. Some time later, the business provides a collection of accepted checks to a bank for processing and settlement.
The traditional mode of check payment has drawbacks. First, the business has no assurance that the customer's check is a valid instrument that will be honored by the bank. Second, it may be inconvenient and inefficient for the business to physically transport the checks to the bank for processing.
In view of these shortcomings, some businesses use more advanced methods of processing checks. One such method is referred to herein as a verification method. In the verification method, at the time of transaction, the business may make an electronic inquiry to a service provider. The inquiry asks the service provider to verify whether the customer's account is valid and in good standing. The service provider may also optionally verify that the customer has sufficient funds to make the payment. As in the traditional method, the verification method requires the business to retain checks for later physical settlement at the bank. Further, despite the safeguards provided by advance verification, there remains a chance that the bank may not honor a customer's check.
Another proposed method for processing checks is referred to herein as an electronic transaction method. In the electronic transaction method, the business converts the customer's check to an electronic transaction. Using this method, a service provider can transfer appropriate funds from the customer's account to the business's account. To authorize such a transaction, the business may ask the customer to sign a printed receipt. The business also may void the customer's paper check to prevent it from being used again. The electronic transaction method dispenses with the need for the business to physically submit checks for settlement at the bank.
Currently, a service provider may provide specialized single-use functionality to process a check in accordance with a particular kind of check processing method. A business which desires to use such a check processing method may purchase or otherwise acquire the specialized functionality. This approach may have drawbacks. For instance, it may be a time-consuming, disruptive, and potentially expensive task for the business to replace existing payment functionality with new payment functionality.